Just as the notorious Willie Sutton described the bank robber's propensity to "go where the money is," securities fraudsters will follow the money, too. Households led by people over 40 already own 91 percent of America's net worth. As the baby boomers continue to age, it will be a very short while before the vast majority of the nation's savings are in the hands of the elderly. We can see this one coming a mile away.

“Even the most informed investors need to adhere to the 'it can happen to you' philosophy.”

In the study on senior investor fraud released at the SEC's Seniors Summit last year, one interesting finding was that investment scam victims are more financially literate than nonvictims. Since financial competency alone isn't enough to prevent seniors from falling for scams, what do people need to know about the social influences, or persuasive tactics, that may be used against them?

This may reflect the adage that "a little knowledge is a dangerous thing." Rather obviously, seniors have experience. Fraudsters know this and play to it. They compliment the would-be victims on their good sense and financial literacy. That's just one of the ways that the scam artist can make us too comfortable and get us to let our guard down. Even the most informed investors need to adhere to the "it can happen to you" philosophy.

It isn't just financial competence but also street smarts and a healthy dose of skepticism that are in order to detect and avoid scams. We've identified more than a dozen social tactics that scam artists use in making their pitch.

The most common tactics:

Phantom fixation: The con artist dangles a sum of money, or possibly a vacation, to tantalize the victim.

Social consensus: The scammer convinces the victim that his or her peers and neighbors, and other respected people in the community, are all making this particular investment.

Scarcity approach: The victims are pressured to act fast, before it's too late.

Reciprocity principle of social interaction: The con does a small favor for the victim, relying on human nature to induce the victim to return the favor in kind by buying the investment.

Just being aware of these tactics, and understanding how they work, can help not only seniors but investors of all ages to keep their money safe.

As this same study notes, even skeptical people can fall for rip-offs, so clearly just relying on your instincts to avoid scams doesn't always work. What's a better way to distinguish scams from legitimate proposals?

The first rule is to avoid hasty decisions. Take the time to thoroughly research any investment or other financial opportunity. If you can use the Internet, it gives you a huge advantage over the scam artist. There is a wealth of information on government Web sites, including fraud and scam alerts. And a quick search on Yahoo! or Google will probably yield results if others have been approached with a similar proposal and have posted warnings to the unwary.

But there's a very low-tech approach that also works especially well: Discuss the offer with a trusted friend or family member -- and ideally, a financial professional or a lawyer. The study indicated that fraud victims are more likely than nonvictims to rely on their own experience and knowledge instead of openly vetting the situation in a neutral, objective setting. The mere process of describing an investment opportunity to a confidant can help you evaluate whether or not it's too good to be true.

How should investors vet their financial representatives to ensure that they are actually representing their best interests?

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The best advice we can give investors is to ask questions -- and a lot of them. We see too many investors who might have avoided trouble and losses if they had asked basic questions about their financial representatives from the start.

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